Department of Energy and Climate Change
The Secretary of State was asked—
EU Renewable Energy Target
We are making good progress towards our 15% renewable energy target for 2020, and I am confident that we will meet the next interim target of 5.4%, with provisional figures showing that 6.3% of final energy consumption for 2013 and 2014 came from renewable sources.
With the UN climate change conference just days away, on top of renewables subsidies being removed we have learned that the UK will fall significantly short of its renewable energy target. While Labour led global talks, is the Secretary of State going to Paris to learn about the consequences of her cuts or to apologise to future generations?
I am delighted to say that there will be plenty of opportunities during this Session to talk about Paris, and I look forward to doing so. On the specific question of the renewables target, I repeat to the hon. Lady that we are making good progress at the moment. [Interruption.] There are issues, but we are expecting to exceed our interim target. There is more to do, and I am delighted to say that I am working across Government with the Department for Transport and the Department for Environment, Food and Rural Affairs to ensure that we do it.
Does the Secretary of State agree that meeting our renewables target should not just prevent catastrophic climate change but benefit UK workers through the creation of green jobs? Will she commit to ensuring that projects such as the Beatrice offshore wind project, which benefit from public funding, create the sorts of skilled supply chain jobs we need rather than subsidising private companies abroad?
I certainly agree that the direction in which this Government are going in supporting renewables and meeting our low-carbon targets will continue to lead to the growth of the green economy, which is a really important addition to the growth in the economy nationally.
The announcement yesterday to phase out coal with gas is equivalent, in one announcement, to doubling the amount of renewables we have in our system, and it is possibly the biggest reduction in carbon ever announced by a Secretary of State. Does she believe, though, that any of our EU partners will follow us in taking this route?
I thank my hon. Friend for pointing out the announcement that I made yesterday which shows such strong leadership in reducing carbon emissions in Europe and in the world. It is interesting that he asks me whether other European countries will do this. I am not sure they will. We are not ones to lecture our European friends, but I can tell him that I have had a lot of congratulations and comments of a positive nature about it internationally.
Given that the increase in global temperatures over the past two centuries has been minute, that the Intergovernmental Panel on Climate Change itself has said that most of it is perfectly natural, and that there has been no increase in global temperatures for 16 years, is it not time to simply reject these renewables targets and concentrate on our manufacturing industries and bringing down prices?
I always enjoy hearing from my hon. Friend, but I must say that I do not share his views. I believe that there is a settled view that is supported by science, and it is right that we take action, but I hope that this Government can demonstrate that we can do so while growing the economy. That is the evidence that we are showing people internationally, and that is why we are providing such strong leadership.
Given the leaked letter that indicated the purchase of renewables from abroad, will the right hon. Lady make sure that the Scottish islands are in the mix and that we go there for renewable energy? The wind resource is so great that I did not get off Barra on Monday.
The hon. Gentleman will be aware that yesterday I made an announcement continuing our support for offshore wind, which includes a potential application from the highlands and islands project. I hope that that was welcomed by him and by other promoters of offshore wind. I look forward to having further conversations with them, because offshore wind has a strong future in this country, but one that will also drive down prices.
The borough of Kettering is doing more than most in contributing to the national renewables target, with a major wind farm at Burton Wold, another one at Rushton, and lots of applications being received for solar farms. However, one of the big issues is the delay in connecting these new farms with the national grid because of the lack of suitably qualified engineers across the country. What can the Department do, with industry, to solve this problem?
There seems to be a difference of opinion between my hon. Friend the Member for York Central (Rachael Maskell) and the Secretary of State on progress towards our targets, but let us assume that the Secretary of State is right. If we are making such good progress, and bearing in mind that this is likely to be the warmest year on record, is now not the time to stretch ourselves by going to Paris with even tougher targets, to incentivise more renewables in the system?
“Make them tougher”, he says from a sedentary position. We are well admired internationally, not only for our tough targets, but for our announcement on coal yesterday and for our structure of carbon budgets and constant monitoring. I am proud of that and I wish the hon. Gentleman would be, too.
Progress has been much slower in meeting heat targets. The renewable heat incentive is due to close and as yet we have had no assurances of what will come next. Can the Secretary of State assure us that there will be continued support for decarbonising the heat sector?
The hon. Gentleman is entirely right. The two areas of renewable energy where we need to make progress are transport and heat. The renewable heat incentive has been a success, helping 50,000 homes. My proposal for continuing it is currently with the Chancellor of the Exchequer, so we will have to wait until after the spending review.
Does the Secretary of State agree that subsidising progressively unaffordable fossil fuels, many of which are produced abroad, while cutting off support for renewable energy at home when schemes are on the verge of being self-supporting, mitigates our chances of reaching our targets?
Thousands of jobs have already gone and thousands more are at risk since this Government slashed support for renewables. Ministers have blocked onshore wind developments, slashed support for solar and are chopping and changing energy policy so often that the CBI says they are deterring potential investors. How many more renewable energy companies must go under—how many more jobs must be lost—before this Government will live up to our international commitments and end this assault on Britain’s clean energy industries?
It is disappointing that, when talking about clean energy and low carbon, the hon. Lady failed to mention yesterday’s announcement. We are the first large developed country to announce a date for taking off coal. That is a great achievement and it is important as part of our future low carbon emissions. Our plan is for a green economy. We are continuing to develop jobs as well as support manufacturing and industry. I am proud of the direction we are taking.
Wholesale Energy Prices
Lower wholesale gas and electricity costs have contributed to the price of fixed-rate dual fuel tariffs falling by £100 compared with last year. Average domestic gas prices have reduced by 6.5% since the start of this year. All the major energy suppliers have reduced their standard gas tariffs at least once this year. The Government expect suppliers to make sure any reductions in the costs of supplying energy are passed on to consumers.
In order to keep household bills down, it is vital that we invest in energy infrastructure. Does the Secretary of State agree that the proposed IFA2 interconnector station at the Daedalus airfield in Gosport, which will connect to Chilling in Fareham and provide a second electricity link between Britain and France, is a welcome development that will make a positive contribution to affordability and sustainability?
My hon. Friend is right to say that interconnection can bring important, significant benefits to consumers by enabling access to cheaper electricity overseas, lowering household bills and supporting security of supply. The IFA2 project, along with others involving France, Norway, Belgium, Denmark and Ireland, is progressing through Ofgem’s regulatory regime, which is designed to bring forward interconnector investment in the consumer interest.
Rising wholesale energy prices have a particular impact on the elderly, with an estimated 540,000 older households in fuel poverty in recent years. Evidence shows that a large number of elderly people are prevented from switching to cheaper tariffs, which can be found only through online comparison sites, because they simply do not have access to the internet. What is the Department doing to ensure that the major energy suppliers are making their cheaper tariffs accessible to the most vulnerable in society?
My hon. Friend makes an important point. Switching is an important way to save money and reduce costs, and there is a huge choice available online. However, there is a problem for people who are not online, which is why my Department has funded, for the third year, the big energy saving network. The network provides funding for direct face-to-face advice, targeting the most vulnerable in society to help them through the switching process and ensure that they access the cheapest tariffs.
Household bills in this country will never be manageable until the Government understand that it is not just the wholesale unit price of energy that matters, but the number of units each household needs to buy. We can make massive bill reductions with energy efficiency, and we can also end the scandal of so many British children going to bed tonight in cold homes. We have to do this. Ministers have promised me action for many years at the Dispatch Box. This Government’s record is abysmal. Come on, Secretary of State, let us do this for Britain.
I do not agree with the hon. Gentleman’s conclusion, but I share his view that energy efficiency is an incredibly important way of saving money and helping householders. One of the most important ways of doing that will be through smart meters. Once people can access and see how much energy they are using, they will be able to use less of it. We are proud of the smart meter roll-out. We expect every household and business to have one by 2020.
I spoke to the Secretary of State about this beforehand. Yesterday, I met Age UK, which informed me of its concerns about the lack of energy efficiency schemes for those living in park homes. Ever mindful of the fact that the age of those living in park homes is from 55 upwards to perhaps 80, if she wants to make efficiency savings for them, she could reduce prices. What has been done for park homes?
We addressed some of the issues that are particularly challenging to park homes in the fuel poverty targets under the previous coalition Government. I agree with the hon. Gentleman that more needs to be done. It is particularly difficult for park homes without electricity meters. Those with electricity meters can access support, but the ones without them find it more difficult. I will certainly take that matter away and review it.
Renewable Energy: Subsidies
Even with the actions we are taking to control levy control framework costs and to protect consumer bills, we remain on track to deliver at least 30% of our electricity from renewable sources by 2020. Detailed assessments of the impact of cost control actions were published by my Department alongside each of the measures as they were announced.
My hon. Friend is absolutely right. There was a focus on the levy control framework, which was particularly my approach, as soon as we came into government. I was shocked to find the scale of the overspend and have therefore responded to keep consumer bills under control.
In Eastleigh, solar generation has leapt ahead due to the feed-in tariff, and many of my constituents want that to continue. Will the Secretary of State ensure that clean energy is supported and that both large and small solar energy generators in my constituency are not harmed by future changes?
I reassure my hon. Friend that we remain committed to clean energy, but in a way that minimises costs to consumers and maximises the benefits of the renewable industry to the UK. Our support has significantly driven down the cost of renewable energy and led to greater than anticipated levels of deployment.
May I congratulate my right hon. Friend on her speech yesterday and warmly welcome her determination to reach zero subsidy? Does she agree with me that if we eliminated all subsidy for large-scale solar PV—photovoltaics—and concentrated it on domestic and small-scale solar PV, we could actually achieve our renewables target, protect jobs and reach zero subsidy and grid parity within the LCF earlier than 2020?
I share my hon. Friend’s enthusiasm for reaching grid parity and his support for solar in general. Solar has been a great British success story: costs have come down and delivery has far exceeded expectations. He will be aware that we are considering the consultation at the moment. The consultation closed after we received the responses, and I will report back on it. I will take his suggestions under advisement.
Will the Secretary of State now have a go at answering the question asked by my hon. Friend the Member for Wigan (Lisa Nandy) about how many more thousands of jobs will be lost in the renewable energy sector as a result of her Government’s decision to pull the plug on solar and onshore wind? How does she respond to the comments of the United Nations chief environment scientist Jacquie McGlade, who recently said that Britain now, under the Tory Government, is sending a “worrying signal” by
“shifting away from clean energy as the rest of the world rushes towards it”?
Once more, with the right hon. Gentleman’s comment, we hear an Opposition Member fail to mention the fact, as announced yesterday, that we have put a date on the end of coal. I have received huge congratulations from international commentators. The situation is completely different from the one he tries to paint. The Government are committed to growing the renewable industry, are proud of the amount by which it has grown and will continue to support it, including through job creation.
Progress in renewable electricity generation has been put in jeopardy, particularly in rural communities, with the ending of renewables obligation certificates for wind turbines for farm generation of electricity. Will the Secretary of State provide a response that brings hope to those in rural communities?
Onshore wind is demonstrably the cheapest form of renewable energy, yet its route to market has been constrained. The Government’s no new subsidy commitment in their manifesto is clearly being implemented. Would the Secretary of State support the concept of subsidy-free onshore wind? If so, does she agree with the assessment of the Committee on Climate Change of what would constitute subsidy-free onshore wind?
That is a very interesting question. I said last time I was in the Chamber that we would look at that idea and we will continue to do so. I remind the hon. Gentleman that we have said that there will be no new subsidy and that such schemes must be supported by the local community. We are happy to engage with developers and have that discussion if they have a proposal.
Renewable energy is vital to the local economy in my constituency. It is encouraging that one of the big investors, DONG Energy, welcomed the announcement by my right hon. Friend yesterday. It is important that we develop an energy cluster on the Humber to reduce costs and maximise benefits. Will she assure me that she will do all she can to achieve that?
My hon. Friend is absolutely right. I received a message of support from DONG Energy, which is a big investor in offshore wind. The UK is rightly proud of its offshore wind sector. We have more offshore wind than the rest of the world put together. There is a lot of interest in that internationally and it has great export potential. We will continue to support it.
I applaud the Secretary of State’s announcement yesterday in her reset speech that coal will be phased out by 2025 on the grounds of its unacceptably high carbon emissions. In the same speech, she indicated that temporary subsidies to assist the deployment of renewables, which are the lowest-carbon alternative energy source, would come to an end, while permanent subsidies for the deployment of gas, which is a far higher carbon alternative, would be maintained. On reflection, does she find those positions at all contradictory?
I congratulate the hon. Gentleman on his new role. Our position is that subsidies are supposed to be temporary. That is why I set out a plan yesterday to reduce the subsidy for offshore wind. The industry is happy to engage with us on that basis. We will set caps with it and, I hope, deliver offshore wind with it at a lower price than has been achieved before. On the other subsidies that he mentioned, we are making sure that we deliver a balance. There has been woeful underinvestment in infrastructure over recent decades. Under Labour, no nuclear power station was commissioned, which was a disgrace. We will move forward with a secure supply of electricity.
Fuel Poverty: Energy Efficiency Schemes
From 2013 to the end of August this year, the energy company obligation had installed about 887,000 energy efficiency measures in more than 700,000 households on low incomes or in deprived areas. We are clear that the support should go to those in the greatest need.
I thank the Minister for her answer, but the huge drop in the installation of energy efficiency measures over recent years gives me no confidence that the Government are taking the scandal of fuel poverty seriously. Research by the Association for the Conservation of Energy has shown that the installation of energy efficiency measures dropped by a staggering 65% between 2012-13 and 2014-15. What steps is the Minister taking to reverse that shocking trend?
We are proud to have achieved more than 887,000 measures on energy efficiency. As my right hon. Friend the Secretary of State said yesterday, we will redirect our ECO budget in the coming years towards those in greatest need and those who are suffering from the worst impacts of living in cold, damp or drafty homes.
With the withdrawal of Government funding for the green deal finance company, it is now even harder for overstretched families to afford energy efficiency schemes in their homes. Too often, poor quality housing stock leaves families in fuel poverty. What funding will the Minister introduce to help families to save money on their increasingly unaffordable energy bills?
The green deal plan was a small percentage of our measures, and it was closed to new entrants precisely because it did not have the take-up that we had hoped for. Some 96% of installed measures are delivered through ECO, and, as I have explained, we have put in a bid to focus our ECO even more on the fuel poor, which is our top priority.
Let us get to the crux of this issue. The Department’s stated goal is for as many fuel-poor homes as is reasonably practicable to be rated at least at band C for energy efficiency by 2030. However, between 2010 and 2013 that was achieved for only 70,000 fuel-poor households, leaving 95% still to be improved. Does the Minister accept that at that rate of progress, her Department will miss its 2030 target by 100 years?
I do not agree with that. The key point is that an enormous number of homes do not currently reach the band C efficiency level, and we are determined to improve that as far as possible. That is why my right hon. Friend the Secretary of State announced yesterday that we will focus all our energy efficiency and fuel poverty budgets on the most needy. That is vital.
Paris Climate Change Conference
The Government support the view that the Paris agreement should set out a long-term direction on adaptation for all countries. In 2014, only 16% of climate finance mobilised to developing countries supported adaptation, and it is clear that globally we must do more. That is why the Prime Minister has reaffirmed the UK’s commitment to aim to spend 50% of our climate finance on adaptation.
Many constituents have contacted me following a campaign by ActionAid about the effects of climate change in developing countries such as Bangladesh, where flooding particularly affects women and children. In Paris, will the Secretary of State support a specific, binding goal that ensures that the wealthiest countries in the world support developing countries in adapting to climate change?
I can reassure the hon. Gentleman that the Government are committed to getting a deal in Paris. We are aware that that deal will require considerable financing, which is why my right hon. Friend the Prime Minister announced that we will increase our commitment to climate finance up to $9 billion over this five-year spending period—a significant increase. We remain committed to making adaptation an important part of that, but we are not yet in a position to commit the rest of the world in terms of the final deal that will be reached.
The Paris conference of the parties aims to replicate the successful method of the UK Climate Change Act 2008—a long-term goal that is specified under a legally binding agreement that achieves stability through a series of five-year reviews. The Secretary of State has abandoned long-term targets and destroyed the stability of the investment framework, and last night her Department’s emissions calculator showed that after her reset speech the shortfall against the fourth carbon budget has increased by 54 million tonnes of CO2, which is 10% away from the legally binding fourth carbon budget. Does she now feel more shame showing her face in the city of Paris, or in the city of London?
I find the hon. Gentleman’s question disappointing. The UK is rightly proud of our Climate Change Act, and of the targets and aims that we are setting for ourselves. We will provide leadership in Paris. The number of texts and notes that I received yesterday after creating that strong sign on coal was remarkable. I urge the hon. Gentleman to stop knocking the United Kingdom’s negotiating position, and to start supporting us in leading and getting a global deal.
Government's Environmental Agenda
Ministerial colleagues in DEFRA lead the Government’s environmental agenda overall. My Department leads work to cut carbon emissions, which is essential for protecting our environment for future generations. Working across Departments is essential to deliver our carbon commitments. Let me give two examples: we are cutting emissions, driving innovation and creating jobs through our joint work with the Department for Communities and Local Government on energy efficiency and with the Department for Transport on low emissions vehicles.
To take my right hon. Friend away from the UK, Ascension Island is one of the last refuges for the global stock of large fish, including tuna, marlin and sailfish. With that in mind, will she update me on progress in creating a marine conservation zone around Ascension Island and other British overseas territories?
I thank my hon. Friend for his important question. We are working with overseas territories on their current marine management arrangements to audit them and provide support in addressing gaps. In particular, we are working with the Ascension Island Government to balance their ambition for a sustainable fishery with the development of a marine protected area.
The Secretary of State may know that Cambridge City Council had to cancel plans to put solar panels on 1,000 homes after her changes in policy. What discussions has she had with colleagues in the Department for Communities and Local Government ahead of her abrupt policy changes?
The Secretary of State for Communities and Local Government agreed a city region deal this week for Merseyside without including the tidal and barrage schemes that were part of the bid. It was said that the Department of Energy and Climate Change was pushing back against them. Is that true?
10. What steps she is taking to encourage the building of further new nuclear reactors. (902228)
My hon. Friend will be aware that the Government are committed to an expansion of new nuclear power, which is a vital part of our work to build a clean, affordable, safe and reliable energy system for the future. The industry is taking forward proposals to build six new nuclear power plants, providing 18 GW of low carbon power in the UK. We are in regular contact with it.
Following the recent welcome announcement that China will be involved in the provision of new nuclear, will my right hon. Friend reassure the House and my constituents that all proper safety and security measures will be taken, and that a robust mechanism for monitoring such will be in place?
Yes, I can absolutely reassure my hon. Friend. Safety in our nuclear plants is of paramount importance. Any operator of a UK nuclear plant must meet the UK’s stringent safety and security regulations, which are enforced by an independent regulator. They provide a whole range of controls, including safe and secure operation, consumer protection, security of UK supply and enforcement of contractual obligations.
I wish the Government would apply their horror of subsidies to the nuclear sector. The Secretary of State’s response to the cross-party objection to the departmental minute on Hinkley fails to address concerns that rather than a £19 billion liability on the public purse, Hinkley may in reality mean an eye-watering £45 billion bill for householders and taxpayers. That is just for one new power station that will not boil a kettle for another decade. At the very least, does she agree there must be a full Commons debate on the issue and an independent examination of the costs before proceeding?
The hon. Lady can, of course, use the normal methods for encouraging a debate. There have been many already. Hinkley Point offers low carbon affordable energy that is highly cost-competitive with clean energy sources. The point is that it is base-load. The UK bill payer will not have to pay a penny until it is actually generating. That is very good value for the UK bill payer.
First, I would like to congratulate the Secretary of State on her masterly speech yesterday.
Does the Minister agree that we need a mix of energy, including nuclear, which I am pleased to say we have in my area of Somerset, as well as solar and wind? It has to be a balance, it has to be at the best cost and it has to be about innovation, which will, in itself, create the sorts of jobs in the energy sector that Opposition Members are worried we are losing.
My hon. Friend is exactly right. We need an energy mix, which is exactly what we are achieving and what my right hon. Friend the Secretary of State set out in her speech yesterday. I was delighted to visit Hinkley Point last week and see the enormous pride and excitement in the area about the prospective jobs and work in the supply chain and the huge investment in the area. It is really good news for the UK and our energy security.
The hon. Lady will know that the UK has an enormous nuclear legacy dating back to the 1940s and ’50s. A huge amount of work is being done at Sellafield and other sites to dispose safely of that nuclear waste. As she will know, the budget is extremely large—in the region of £3 billion—but that money is being spent to deal safely with this very long legacy. I can assure her, however, that new nuclear creates far less waste. We are planning a geological disposal facility to make sure that future taxpayers have nothing like that legacy to deal with.
Paris Climate Change Conference
I have been working closely with my right hon. Friend the Secretary of State for International Development to secure an ambitious global deal in Paris. Tackling climate change and promoting sustainable development are two sides of the same coin. We cannot achieve one without the other. We cannot end extreme poverty any other way. The global goals established earlier this year provide a clear framework for sustainable development, with full integration of climate and environment goals.
It is vital that we reach a binding agreement on tackling climate change in December, and I, too, welcome the Secretary of State’s announcement about closing coal-fired power stations by 2025, as it sets a strong example to other countries. Will she go further, though, and state what percentage cut in emissions by 2030 she is pushing for?
We are focused on Paris at the moment. We are working with our EU colleagues, other countries and like-minded allies to bring along other countries that might be more reluctant or more difficult to get across the line. With our EU colleagues, we have set targets, such as that for a 40% reduction by 2030, but at the moment our focus is on Paris.
Solar Energy: Schools
12. What steps her Department has taken to encourage schools to invest in solar energy; what discussions she has had with the Chancellor of the Exchequer and the Secretary of State for Education on the effect of borrowing restrictions on investment by schools in solar energy; and if she will make a statement. (902231)
In April 2014, my Department published a leaflet encouraging schools to invest in solar PV, which was followed up with a letter to local authorities in November 2014. We encourage deployment through the financial incentive of the feed-in tariff, but discussions are always ongoing with other Departments on what more can be done to help schools invest in solar.
Thousands of schools cannot make their contribution on renewables and save thousands of pounds each year because of the Chancellor’s rules on borrowing to install solar. One school, Wilmslow High, wants to do this, and its local MP, a Mr George Osborne, has said:
“I am happy to support you wherever I can”,
but he is awaiting a reply from the Department of Energy and Climate Change. Will the Department reply to the local MP so that he can make representations to himself as Chancellor and end these ridiculous rules?
I would like to apologise publicly to the local MP. I shall look into the matter today. Restrictions on school borrowing are necessary, however, to protect public sector accounts. School borrowing contributes to public sector net debt and borrowing—two important fiscal measurements that we must control in order to bring down the national deficit and retain economic confidence—which is why we have no plans to lift restrictions on borrowing.
District Heating Sector
We do not believe that further statutory regulation is appropriate for the sector at this stage, but are keeping this under review. We welcome the voluntary consumer protection scheme, Heat Trust, which is launching next week. The scheme aims to provide customers with comparable protections to those available in statute to gas and electricity customers. We believe that, when combined with metering and billing regulations, this represents a proportionate approach to the consumer challenges in the sector.
The vast majority of customers served by district heating networks, including thousands in my constituency, believe strongly that they do not offer a fair deal, and the industry-led solution, Heat Trust, will I think do little to allay fears in that regard or build consumer confidence. May I urge the Secretary of State to revisit the question of whether effective statutory regulation would give customers locked into these monopoly schemes a better deal?
The hon. Gentleman raises an important point. I am aware that heating networks do not have the same regulatory framework. Heat Trust is launching on 25 November, following development and consultation with consumer groups and Government. I see that he has a certain doubt about the success of Heat Trust, but we will work closely to monitor its impact and will assess, based on its record, whether further action is needed.
Solar Power: Feed-in Tariffs
During consultation on the proposed changes to the feed-in tariffs, we strongly encouraged all parts of the small-scale renewables sector to provide evidence on the likely impact. The actual impact on solar companies will, of course, depend on the options taken forward when the responses to the consultation have been considered.
The Minister will be aware of the thousands of job losses on Teesside, with steel, construction and mining all shedding people. Even the Government are contributing to the misery, sacking hundreds of employees at Her Majesty’s Revenue and Customs. Does she really want to add thousands more from the solar, energy conservation and energy-intensive industries as a direct result of her policies?
We are huge supporters of the solar sector. The point is that there is a balance to be struck between the enormous success in deployment, which is exceeding our expectations, and the impact on the bill payer. We have to keep that balance. We have consulted on it and will issue our response in due course, but it is absolutely our intention to see the solar sector continue to thrive.
A number of leading solar community projects and green energy companies are based in my constituency, including Good Energy, which supplies more than 50,000 UK consumers. People who work in the industry fully understand the need for it to be sustainable, but they feel that a drop of up to 87% overnight is more than the industry can cope with, in terms of local jobs and growth. Will the Minister look at what more can be done to support existing projects and for mechanisms to keep the solar industry alive until grid parity is reached?
I am grateful to my hon. Friend for raising this very important matter for her constituency. I can absolutely assure her that we are looking at it carefully. I had a round table meeting with a number of solar firms and heard their views at first hand before the consultation closed. We are looking carefully at the more than 55,000 responses and will come forward with our policy response as soon as we can.
Virginia Fassnidge is one of my constituents who installed solar panels to cut her family’s household bills and save carbon. Will the Minister explain to those who want to follow her example why they should, when the 98% cut to the feed-in tariff subsidy scheme no longer makes it attractive to consumers, risks the very viability of the domestic solar industry when it is about to become viable without subsidy and completely undermines the Secretary of State’s solar revolution?
I am grateful to the hon. Lady for her question. Obviously her constituent will be pleased to know that the subsidy from the bill payer that she has received will continue to be available to her—I think there has been some confusion about that point. For those who come later, the proposal in our consultation is for the return to investors to be in the region of about 4%, as opposed to the current level, which is significantly higher. We were required by the EU to look at the tariffs on a three-year basis and that is what we have done. We have put forward a proposal and we are looking carefully at the responses.
The Government’s decisions have had a devastating impact on our manufacturing industry in the UK. That flies in the face of exactly what the Government say they want to achieve in creating an industrial balance within our economy. Just like the steel industry, the Government have been found wanting.
We have a big and growing energy sector. We are bringing forward policy proposals to develop new sources of energy, which will mean a whole raft of new jobs and new opportunities for people, but there is always a balance to be struck. What we cannot do is permanently subsidise at the expense of the bill payer; many issues have already been raised about fuel poverty. In the end, industries need to stand on their own two feet.
Paris is a city that is currently in mourning, but in less than two weeks’ time we will see the world gather there in solidarity to seek to achieve the first truly global deal on climate change. Yesterday I announced plans to close all unabated coal-fired power stations by 2025 and to restrict their use by 2023. This is a world-leading commitment to the environment and underlines our crystal-clear determination to cut carbon emissions as cost-effectively as possible. I stress that the UK’s energy security comes first. As we tackle a legacy of under-investment and build a new system of energy infrastructure fit for the 21st century, we need to replace ageing polluting power stations with reliable, good value-for-money alternatives that help to reduce our emissions.
Ofgem estimates that the average household could save about £200 a year by shopping around for their energy needs, but 62% of households have never switched, while 45% mistakenly believe that there is no benefit from doing so. My hon. Friend the Member for Wealden (Nusrat Ghani) raised the issue of online information access, but what else are the Government doing to encourage households to switch and save money?
I thank my hon. Friend for his important question. The more opportunities that we have to raise and draw attention to the opportunities for switching, the better. Switching can indeed save £200 and sometimes more per bill. My hon. Friend is absolutely right, and, as I said, we have plans to reach out to people who are not online and to help the most vulnerable. We also had the recent Power to Switch campaign, which led to a significantly increased number of people switching.
I share the right hon. Lady’s sadness at the recent events in Paris, which shocked the world. As world leaders gather in that same city in a few days’ time to address the threat posed to us all by climate change, will she ensure that we use the opportunity to show real leadership and offer hope to people around the world that we, the international community, can come together to address the common threats to our shared security through shared international goals and by increasing our ambition every five years until the job is done?
I genuinely welcome the hon. Lady’s question, and I am proud of the fact that we in the United Kingdom are united across the political divide in wanting to get an ambitious deal in Paris. I also share the hon. Lady’s view that what we need is not just a deal, but a deal that has five-year reviews as part of it, so that whatever the final deal—I really hope we will get a deal in Paris—we have some way of coming back regularly in order to reflect on the actual emissions, their consequences and perhaps on new technology that might be available to help us all to reduce them.
I thank the Secretary of State for that answer and particularly for the push she will give to five-year reviews. I also very much welcome the agreement that the G7 leaders reached earlier this year to phase out pollution from fossil fuels by the end of this century and to cut greenhouse gases by between 40% and 70% by 2050 from 2010 levels. Can the Secretary of State confirm that the British Government will continue their support for the Climate Change Act 2008 and will accept the advice due to be given shortly by the independent Committee on Climate Change on what the next round of UK carbon targets—the so-called fifth carbon budget—should be?
T8. Given the ongoing complex challenges in the world, particularly Russia’s recent action in the Ukraine, can my right hon. Friend tell us what steps she is taking further to strengthen this country’s national energy security? (902215)
There is a big, liquid global gas market and we are, of course, trying to bring on our own national gas through shale. I note my hon. Friend’s concerns, and I am happy to say that we get most of our imported gas from Norway. He raises a good point, and we will keep the matter constantly under review.
T2. According to conversations that I have had with a number of energy suppliers, they have evidence suggesting that in-home displays are not used by most of the customers who are provided with them. Can the Minister explain why the Government remain wedded effectively to mandating the provision of IHDs for their smart meter roll-out, rather than allowing consumers to choose the engagement tool for managing their energy use that suits them best? (902208)
Far and away the dominant zero-carbon technology, in the United Kingdom and globally, is nuclear power. I welcomed the earlier announcement that we were working on six new stations in the UK, but an emerging technology involving small modular reactors is causing a great deal of excitement, and could make a big difference. Does the Minister expect the UK to play a part in that?
I am grateful to my hon. Friend for raising this issue. The UK gave up its ability to design and export nuclear reactors some years ago, and we are currently at the forefront of looking at new nuclear technology, including small modular reactors. I recently met representatives of the Nuclear Innovation and Research Advisory Board to discuss some of their exciting ideas, and, subject to the spending review, I think we shall be hearing more about them.
T3. Community-led renewable energy schemes empower communities, tackle fuel poverty and provide jobs, so why is the Secretary of State sitting back and letting the Treasury do a U-turn on social investment tax relief, given that that will undermine new schemes? Does she support community energy schemes, and, if so, will she update the House on her plans to support this important part of the co-operative sector? (902209)
I can reassure the hon. Lady. I do support community energy schemes, because I think that they can add tremendous value in demonstrating the advantages of renewable energy to local communities. We shall thinking carefully about how we can support them in future, and I hope to report to the House in due course.
I commend the Secretary of State for her Power to Switch campaign, but will she commit herself to working with her colleagues in the Department for Work and Pensions, so that next time the winter fuel cheques are sent out, there will be more information about Power to Switch, together with clear details of how to switch on the telephone and on paper?
My hon. Friend has raised an important point. It would indeed be a good idea for us to work more closely with the DWP to ensure that more vulnerable people are told about the opportunities that they might be missing, and I shall take the matter up with my right hon. Friend the Secretary of State for Work and Pensions.
T5. As the Government move the UK Green Investment Bank into private ownership, will the Secretary of State give us a clear assurance that the Government will deliver the full £3.8 billion of capitalisation that was initially pledged to the bank, so that it can continue to invest meaningfully in our green economy? (902211)
We are rightly proud of the Green Investment Bank. It is the first bank to be set up by a Government in this way, and it has played a leading role in supporting renewable energy development. I am excited about the prospect of its moving out of public ownership, raising money, and going into, as it were, the public arena. I hope that it will then provide an opportunity for more investment. As for the hon. Gentleman’s specific question, I shall have to come back to him with a detailed answer.
Earlier this month, the Government said that they would negotiate with the European Union about the 5% value-added tax on female sanitary products. Would my right hon. Friend be prepared to extend that discussion to the issue of the 5% VAT on fuel, which is an essential for most households?
T6. Following the Secretary of State’s notable speech yesterday, in which she stressed the importance of new gas-fired power stations, will she tell us what steps she is taking to assist the progress of the construction of the world’s first full-scale gas carbon capture and storage project at Peterhead power station? (902212)
The hon. Gentleman will be aware of the CCS competition that is going ahead. I have had meetings with the association which promotes that area. As the hon. Gentleman will know, the spending review is coming up and decisions will be made then, but the United Kingdom has been a keen supporter of CCS here and in other countries, and we have spent a great deal of money on trying to explore the opportunities for the UK to extend the life of our fossil fuels.
There is an application to explore for shale gas in the beautiful area of Ryedale in my constituency. Assuming the application and the exploration are successful, what assurances can the Minister offer that an expansion of the industry will not lead to an industrialisation of that beautiful area?
I can absolutely assure my hon. Friend that all onshore oil and gas projects, including shale gas projects, are subject to scrutiny through the planning system, which addresses impacts on residents such as traffic movements, noise and working hours, and that national planning guidance says that, in respect of minerals such as shale oil and gas, new developments should not just be appropriate for their location but take into account the effects of pollution, including the cumulative effects, on health, the natural environment or general amenity, and the potential sensitivity of the area. I am well aware of what a beautiful area he lives in and I assure him we are absolutely focused on that.
T7. May I urge the Minister to look carefully at the impact that any spending reductions in the nuclear sector would have on our supply chain in West Cumbria? Ahead of the spending review, will she press the Chancellor on the need to support our local supply chain through the ongoing decommissioning at Sellafield, alongside the nuclear new build at Moorside? (902213)
I am delighted to tell the hon. Lady that there are huge opportunities for West Cumbria from new nuclear. I have visited Sellafield and the new plant at Moorside. There are enormous opportunities. People are already being recruited. It is believed that, across the UK, we will need to recruit about 8,000 people a year. There are lots of new apprenticeship opportunities. Having met local councillors in the area, I know that they are very excited and positive about the opportunity.
At present, the National Grid pays out £1 billion a year in balancing charges, which is passed on to electricity users. Transmission charges are not fit for purpose. The Government have removed onshore renewable subsidies, and community energy schemes are under attack too. We have a regulation system that was designed 30 years ago. So instead of the rush for new nuclear and ad hoc ministerial announcements, is it not time the Government took a step back and had a proper strategy on energy policy?
That is exactly what I set out yesterday: a proper forward look at our energy policy. The Government are committed to delivering secure, clean and affordable energy not just in the next five years but over the next 10, 15 and 20 years. That is what a Government should do to get the best for businesses and consumers.
Gas has always been acknowledged as a bridge to a decarbonised future but the announcements made by the Secretary of State yesterday will have a cumulative effect. Can she assure us that that bridge has not lengthened and raised the risk of a stranded fleet of new gas generators in 25 years, particularly given that some analysis suggests that the emissions shortfall against the fourth carbon budget has increased from 7% to 10%?
I thank the hon. Gentleman for his question. He is right that there is a widening gap against the fourth carbon budget. I want to be clear that that is not to do with policy. The reason for that is to do with land use—something delightfully called LULUCF, or land use, land use change and forestry sector. I am aware of his views on gas and they are really the same as mine: it is indeed a low-carbon bridge but in future we hope that other sources will come forward.
The port of Immingham in my constituency depends heavily on the import of coal. Many jobs rely on that both in the port and on the rail network. What assessment has my right hon. Friend’s Department made of the loss of jobs in those associated industries, with less coal coming in as a result of coal-fired power stations closing?
I reassure my hon. Friend that that is something we intend to do, but it will be subject to a consultation. We will have the opportunity to look at that issue, but we are talking about 10 years hence, so I hope that there will be plenty of opportunities to ensure that areas can adapt and benefit from other areas of industry that will emerge.
If the Government are serious about meeting the targets on emission levels, instead of yesterday announcing the closure of the coal-fired power stations, would it not have been eminently sensible to come forward with a serious attempt at carbon capture and storage, which would enable us to burn the fossil fuels, coal and shale gas with near-zero emissions, providing secure, affordable energy for generations to come?
I agree with the hon. Gentleman in part, in that there is the opportunity for CCS to enable us to use fossil fuels for longer, but the reality is that the UK coal fleet is extremely old. All of those coal plants are due to come off in the next few years and we would not want to be building new coal-fired power stations now when there is the lower-carbon alternative of gas and the whole prospect of a clean low-carbon future.
Recent analysis shows that UK power could be almost 90% renewable by 2030, while electrifying 25% of all heating demand and putting around 12.7 million electric cars on the road, but that would require cutting demand for space heating by over 50%. That means much smaller bills, too. The Secretary of State has clearly been spending a lot of time with the Chancellor recently; can she tell us whether energy efficiency will be a Treasury infrastructure priority in the future?
I thank the hon. Lady for her question. I am aware of the absolute importance of getting heat right and of the fact that we need new policies in order to meet our targets and that heat is an important part of trying to reduce fuel poverty. I have proposals, and she is absolutely right that some of them are with the Chancellor. I hope to come back and make announcements in due course.
Is the Energy Secretary proud of the fact that at the beginning of December the last deep mine pit in Britain will close, under this Tory Government? Does she really believe that it makes a lot of sense to import 40 million tonnes of coal a year from countries we do not even trust, while at the same time getting rid of thousands of miners’ jobs and those of other people in the area? It is a scandal.
I agree in part with the hon. Gentleman, in that I do not think it is right for us to be importing coal from abroad. I do not think it is right for coal to have a long-term future in this country, which is why I was pleased to announce yesterday that we have put a final date on coal sourced for electricity of 2025.
I am intrigued by the answer the Minister has just given on heat policy, because it is very hard to see how we could meet our heat renewables target without substantial increases in Government spending, yet surely we expect there to be reductions in the comprehensive spending review next week. Will the Minister promise that that target will be sacrosanct, and that any reduction in funding will perhaps be met with a commensurate increase in regulation in order to make sure that we meet our 2020 targets?
I thank the hon. Gentleman for his question. He is right that regulation is another way to approach the issue; basically, we can do so through either some form of subsidy or some form of regulation. I apologise to him, because I am going to wait and see how the cards fall before fully answering that question.
I am grateful, Mr Speaker.
The Minister said in earlier answers that she wants the renewable energy industry to be sustainable financially and commercially successful, but at the same time the Government have taken the subsidies away at a rate that has damaged the industry, and they have not applied that policy to nuclear. Surely she can see the damage being done and the inconsistency in the Government’s approach.
The hon. Gentleman will realise that there is a balance to be struck. We have seen enormous bill payer-led subsidies for onshore wind, solar and other clean carbon technologies, and there is a balance to be struck: the bill payer cannot be expected to foot the bill for an unlimited period. On nuclear, private investment is going into Hinkley C. The taxpayer will not be paying anything until that produces, and the cost per megawatt hour generated of electricity will be very competitive with present clean carbon costs.